Government postpones fuel tax increase again
The Argentine government has once again postponed the update of taxes on fuels, which was scheduled to take effect this Monday. The decision aims to avoid additional pressure on fuel prices that could impact inflation. Through Decree 829/2026, published this Monday, the Executive extended until September 30 the tax amounts that were in force during August. At the same time, it formally moved to October the application of pending increases in the Tax on Liquid Fuels (ICL) and the Tax on Carbon Dioxide (IDC).[S1]
According to sources from the Ministry of Economy, the measure seeks to accompany the user and sustain the path of declining inflation. In July, the Consumer Price Index (CPI) accelerated to 2.1%. Consultants say it fell below 2% in August. The official data will be released on Thursday, September 10. The resolution published this Monday establishes that from October the remaining increases corresponding to the updates of 2024, 2025, and the first two quarters of 2026 should take effect. However, the Executive avoids anticipating that all that increase will actually be transferred next month.[S1]
Mechanism and impact of the postponement
The mechanism establishes that the fixed amounts of the ICL and IDC must be updated quarterly according to the evolution of the CPI. However, the government has been successively postponing the updates provided by the regulations and, in some months, applying only a part. The decision to defer increases has widened the gap between what fuels should pay according to the update established by the regulations and what is actually charged. According to a report by Economía & Energía, in August the sum of the ICL and the CO₂ tax applied to gasoline reached $411 per liter, compared to $634 that would correspond according to the planned update. The difference is $223 per liter.[S1]
In diesel, the gap is smaller: in August, $328 per liter was applied, while according to the regulations the updated amount would rise to $410. That is another $82 per liter difference. The last partial increase had been ordered by Decree 693, of July 31. On that occasion, the Executive increased part of the taxes for August and moved the remainder to September. Now, to the pending updates of previous years is added the one corresponding to the second quarter of 2026, and the date moves again, this time until October.[S1]
Fiscal cost and government arguments
The strategy, which seeks to reduce its impact on inflation, has as a counterpart lower collection. Economía & Energía estimates that only for August sales, the partial application represented US$146 million in income that the State stopped receiving. In the first eight months of 2026, the estimated loss of collection due to this policy accumulated US$1,229 million. The new decree establishes that the total pending increase will begin to take effect on unleaded gasoline, virgin naphtha, and diesel from October 1. In the foundations of the decree, the government indicated that the postponement seeks to continue stimulating the growth of the economy through a sustainable fiscal path.[S1][S2]
The decree was signed by President Javier Milei, Chief of Staff Diego Santilli, and Economy Minister Luis Caputo. The measure modifies Decree 617/2025 and establishes that the total pending increase, corresponding to the updates of 2024 and 2025 and those of the first and second quarter of 2026, will begin to apply from October 1, 2026. According to the norm, these fixed amounts are updated quarterly based on the consumer price index published by INDEC. The text explains that, month by month, different norms have been successively postponing the effects of these updates for unleaded gasoline, virgin naphtha, and diesel, thus avoiding the immediate transfer to the pumps.[S2][S3]
Context and accumulated delay
The strategy that the government has carried out for months with the objective of postponing increases in fuel taxes and reducing the impact on inflation has had a significant impact on public accounts, since the State has already given up fiscal revenues of more than US$2,100 million between January and November 2025 to contain final prices. Despite the increases authorized during the current administration, the indirect tax burden on gasoline is still 34% lower than in 2018, which represents a real reduction of 47% in the value of the tax compared to March of that year.[S3]
The accumulated delay originated mainly during the last two years of Alberto Fernández's administration, who kept taxes frozen systematically to avoid their transfer to the CPI. In practice, Javier Milei's administration went from an initial normalization attempt to a policy of limited monthly adjustments, prioritizing macroeconomic stability and inflation reduction over the collection goal. According to a report by the Instituto Argentina Grande (IAG), the ICL went from representing 8.9% of the price of super gasoline in November 2023 to 19.25% in July 2026. The postponement has been made 13 times since 2024.[S2][S3]
